China’s Wanxiang Wins A123 Auction for $260 Million

The assets purchased may include A123’s automotive segment,
energy-grid storage business, commercial business and U.S.
government business.

“I can tell you that we have won the bid, and the total
value is about $260 million,” said Mo Xiaoping, a spokesman for
Wanxiang Group based in Hangzhou, Zhejiang province. “From our
side, we see no additional obstacles to complete the deal.”

The company will seek court approval to sell the assets
from U.S. Bankruptcy judge Kevin Carey at a Dec. 11 hearing in
Wilmington, Delaware.

A123’s automotive business includes facilities in Livonia
and Romulus, Michigan. A123 used $132 million of the grant
toward building the two Michigan factories.

Shanghai Automotive

As part of the purchase, the buyer may get A123’s stake in
a joint venture with Shanghai Automotive Industry Corp.

The grid business focuses on energy generation,
transmission and distribution while the commercial division
develops products for industries such as telecommunications,
industrial robotics and power tools, according to court papers.
A123 works with the government on portable power solutions,
unmanned aerial vehicles, pulsed power weapons as well as small
energy cells for remote devices.

A123 announced in August that it was working on a deal with
Wanxiang, China’s largest auto-parts maker, for financing in
exchange for a majority ownership stake. The battery-maker
needed a lifeline after recalling faulty batteries supplied to
its main customer, Fisker Automotive Inc.

Fisker Chief Executive Officer Tony Posawatz said last
month the Anaheim, California-based automaker was awaiting the
sale of A123’s Michigan plant that makes lithium-ion batteries
for its Karma so it could resume production of the $103,000
plug-in sedan.

Stake

Wanxiang had planned to invest as much as $465 million in
A123, giving the Hangzhou, China-based company a stake of as
much as 80 percent, A123 said in an Aug. 16 statement.

Wanxiang has been pursuing approval from the Committee on
Foreign Investment in the U.S. CFIUS, a multiagency group led by
the Treasury Department, reviews mergers and acquisitions for
national-security concerns when a takeover may give a foreign
owner control of a U.S. company.

A123, based in Waltham, Massachusetts, filed for bankruptcy
in October after the Wanxiang deal was scuttled amid
congressional Republicans’ reluctance to allow the sale of the
government-funded company to a Chinese company.

A123 listed assets of $459.8 million and debt of $376
million as of Aug. 31 in court documents.